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$1 billion Allied Universal deal adds foreign guards, U.S. events

The largest private-security firm is built on Philly s former Spectragard

Steve Jones is CEO of Allied Universal, the nation's largest security guard company with 150,000 employees (and a couple of dozen robots). The company was formed in 2016 in the merger of Conshohocken-based AlliedBarton with Universal Services of Santa Ana, Calif., and has split its headquarters between the two locations. Jones says finding skilled people to hire run new digital securities technologies are two of the big challenges in the business.
Steve Jones is CEO of Allied Universal, the nation's largest security guard company with 150,000 employees (and a couple of dozen robots). The company was formed in 2016 in the merger of Conshohocken-based AlliedBarton with Universal Services of Santa Ana, Calif., and has split its headquarters between the two locations. Jones says finding skilled people to hire run new digital securities technologies are two of the big challenges in the business.Read moreDavid Swanson

Allied Universal, the 160,000-worker, $5.5 billion (yearly sales) security-guard and janitorial company with dual headquarters in Santa Ana, Calif. and Conshohocken, says it has agreed to pay $1 billion to purchase 50,000-worker, $1.5 billion U.S. Security Associates, of Roswell, Ga. from Goldman Sachs Merchant Banking Division.

This is the latest in a string of investor-financed deals that have established Allied Universal as the largest U.S. private-security and building-cleaning employer. Its Conshohocken office dates back to one of the firm's predecessors, the late Flyers owner Ed Snider's and former police officer Bill Whitmore's SpectaGuard, which provided security at venues including the former Spectrum.

Chief executive Steve Jones says larger firms can compete successfully in the fragmented business by pumping investor capital and billions in borrowed funds into updated digital security equipment, cutting administrative costs, and adding new clients from offices across the U.S. and other nations.

The deal will be financed with $200 million in equity provided by Allied Universal investors led by French private-equity firm Wendel and New York-based Warburg Pincus, which each own one-third of Allied Universal; plus $800 million in debt.

U.S. Security profits (before interest, taxes and financial adjustments) totalled $95 million this year.

Allied Universal says it plans to cut $55 million in expenses from the combined companies to help make the deal profitable.

The sale includes U.S. Security's foreign arm, Andrews International, which has clients in Canada, the U.K. and Latin America, where Andrews protects businesses and travelers in several nations from its offices in Bogota, Colombia and San Pedro Sula, Honduras; and California-based StaffPro, a "consulting and investigative division and event staffing business."

U.S. Security Associates considers the sale a reward for its focus on "world-class customer service," chief executive Richard Wyckoff said in a statement.

Allied Universal boss Jones called the company he's buying a "scalable business with significant potential" for growth.

The deal is the latest in a string of "strategic and transformative acquisitions" investors have funded at Allied Universal, said Chandler Joel Reedy, managing director at Warburg Pincus.

The sale is supposed to close by the end of September.